Simulate 200 alonte carlo trials of the present worth

Assignment Help Business Management

Reference no: EM131375500

Northern Lager Brewery (NLB), currendy buys 250 000 bottle labels every year from a local label-maker. The label-maker charges NLB £0.075 per piece. A demand forecast indicates that NLB's annual demand may grow up to 400 000 in the near future, so NLB is considering making the labels themselves.

If they did so, they would purchase a highquality colour photocopier that costs £6000 and lasts for five years with no salvage value at the end of its life. The operating cost of the photocopier would be £4900 per year, including the cost of colour cartridges and special paper used for labels. NLB would also have to hire a label designer. The cost of labour is estimated to be £0.04 per label produced.

On the basis of the following probabilistic estimate on the future demand, simulate 200 Alonte Carlo trials of the present worth of costs for

(a) continuing to purchase from the local label-maker and

(b) making its own labels. NLB's AIARR is 12%.

Make a recommendation as to whether NLB should consider making its own labels.

Demand	Probability
200,000	0.2
250,000	0.2
300,000	0.2
350,000	0.2
400,000	0.2

Reference no: EM131375500

Questions Cloud

Analysis of hofstede cultural dimensions : For this assignment, please read the introduction as well as chapters 1 and 2 of When Teams Collide: Managing the International Team Successfully as well as the article, "The Cultural Approach to the Management of the International Human Resource..

Determine the number of resources that will be provided : Determine the number of resources that will be provided from within the enterprise and from outside contractors. Explain the reasoning behind the determination of the source for the personnel resources.

The culture of an organization is crucial concept : The culture of an organization is a crucial concept. Define Culture and explain why this concept is so important to an organization's operational effectiveness and an organization's ability to implement strategy. This assignment should be two (2) par..

Management and in the management world : What is the importance of setting goals in management and in the management world?

Simulate 200 alonte carlo trials of the present worth : On the basis of the following probabilistic estimate on the future demand, simulate 200 Alonte Carlo trials of the present worth of costs for continuing to purchase from the local label-maker.

List the value for each lower boundary in this distribution : The upper boundaries for a distribution of waiting times (in seconds) in a grocery store aisle are 51, 64, 77, and 90. List the value for each lower boundary in this distribution.

Diversity as strategy : Read “Diversity as Strategy,” by David A. Thomas, The Harvard Business Review, September 2004; you can find this article on-line. Summarize this article and explain who this helps recruit and retain customers and impact internal operation of a health..

Principally in the states of illinois : Allitron, Inc., and Donovan, Ltd., are interstate competitors selling similar appliances, principally in the states of Illinois, Indiana, Kentucky, and Ohio. Allitron and Donovan agree that Allitron will no longer sell in Indiana and Ohio and that..

Find the apparent depth of the image : Find the apparent depth of the image and the ratio of real depth to the apparent depth under the assumptions taken. Refractive index of water = 1"33.

User Account

All Pages